I’m a musician, not an economist, but I know something is up when the Federal Reserve keeps telling us that inflation is tame. Month after month, we get reports that the “core” inflation rate is modest while my first-hand experience tells me otherwise.
The use of the “core” rate is what disturbs me most, as it strips away volatile prices like energy, food and housing. By removing those items, the Fed hopes to get a real picture of the economy, smoothed out to eliminate spikes that could tilt your perspective.
But how accurate is that, when the major expenses facing consumers today, the costs that really impact their lives are exactly the same as those the Fed is leaving out?
Let’s take a look at all three as it affects my own household.
Housing. I live in California, need I say more? If you’re not familiar with California’s reputation for insanely expensive homes and real estate, let me give you a quick lesson. A 1,200 square foot home with 2 bedrooms and 1 bath, in a not-so-nice part of town, on a normal 50 by 150 foot city lot, now sells for at least $600,000. You start to get slightly more for your money as you inch up to the $1.2 million mark, but still don’t get a decent well-scoring public school district. Rents aren’t much cheaper either. Just out of curiosity, I looked into the apartments that were recently built near the Del Mar train station in Pasadena. Small 750-900 square foot studio units were renting for $2,000 and larger 1,600 square foot places were an astounding $3,200 per month!
So, I guess I should consider myself “lucky” that I own a home and pay a mortgage, instead of having to rent at these exorbitant prices. Still, housing is my biggest monthly cost.
Food. There’s no doubt that the cost of food is rising dramatically. Fed statistics released for April 2007 showed an increase of 5.7% in Southern California. The rest of the country isn’t immune. They saw an increase of 3.9% during the same period. On top of it all, food prices are increasing in 2007 at the fastest rate in years. The official numbers don’t tell the whole story either. If you talk to many families, they’ll tell you that they’re seeing an increase in total food bills closer to 25-30%. Food is my second largest monthly outlay.
Energy. Ah, yes…energy. There is no one who has not been affected by the increase in gasoline prices. I’m very lucky that I don’t have a long commute every day to get to work. In most every case I get to work within 30 minutes or less, and my wife’s commute is usually 15 minutes. We don’t put a lot of wear and tear on our cars, and don’t need to fill up our tanks that often. We drive comfortable but modest cars, not SUVs, that get good gas mileage, but still end up paying almost $60 every time we fill up. Granted, we’re fortunate, living in LA and being able to drive so little, but $500 in gasoline makes for a very expensive energy bill. I’m not even going to start to include natural gas and electricity into the equation, but these have also risen dramatically in the last few years.
I’m sure that no matter where you live you feel much the same as I do and feel the effects of rising prices. Wages for most haven’t kept track and more and more people are finding themselves with larger expenses, real “core” expenses not indulgences, the exact same core that the Fed leaves out.
It’s the total opposite of what was happening in 1998 through 2000, when then-Fed chief Greenspan was crying inflation (there was none) and trying to control the large rise in asset prices that was the market. That action resulted in the greatest loss of asset value in history. I’m surprised that no one is speaking out now about what the Fed’s inaction this time around might mean to the average middle-class consumer.
No one likes rising interest rates, but when the word from above keeps touting that all is quiet on the inflation front, and the Everyman finds himself getting deeper and deeper, something is radically amiss.
May 21, 2007 | Link to this entry
A few months ago for my birthday, my wife gave me a copy of The Complete New Yorker (or TCNY, for short), the eight DVD set that holds the entire published collection of the magazine from the 1920s until (almost) the present. It’s long been my favorite magazine, full of great essays, articles, cartoons, photographs, reviews and fiction. Where else can you find the kind of in-depth writing about subjects that seem to be neglected in most of what passes for journalism today? I was excited to dive in and sample this incredible collection.
I read a lot of reviews of TCNY when it was first published. Some good, some bad. There were a lot of negative comments about the search engine. With over 4,000 issues available, you really need a good engine driving the whole thing. It takes a little time to get used to the hierarchy of the way it’s laid out, but it’s in no way difficult to use. Because the issues are presented as scanned pages, a complete text search isn’t available, but abstracts and keywords generally do a good job of getting you the information you need.
The main index and search engine are loaded onto your computer’s hard drive. From there you enter your search criteria, the results are returned, and you proceed to insert the appropriate disc that contains the items you’re interested in. Unless you’re constantly searching across years (the discs each contain a specific block of time) disc swapping is minimal and effortless. It would be nice to be able to load all eight DVDs onto your hard drive but that’s currently forbidden by the EULA, or End User Licensing Agreement. A Google search returned several how-to tutorials should you be so criminally inclined.
As soon as I installed the package and got familiar with the search engine, which allows you to not only search by keyword, but by author, department, year of publication or specific issue, or any combination thereof, I looked for the late George W.S. Trow’s 1980 essay entitled, Within The Context of No-Context. The author had died in 2006 and while reading his obituary I became aware of this ground-breaking polemic about television and mass culture. And here it was, immediately at my fingertips. It was like having a personal LexisNexis retrieval system on my laptop, albeit one that specialized in only a single magazine.
Next, I did a search for Paul Strand, the early-to-mid 20th century large-format photographer, whose work I’ve always admired. I discovered that in 1974, two years before he died, writer Calvin Tomkins wrote an extremely in-depth and lengthy profile of Strand, then living in Orgeval, France. This was a real find, based on a random search, a gem among gems. As I clicked on the writer’s name in the search engine, I could see all the profiles he had written for the magazine, and by clicking on each entry, could read an abstract of each one. Just a quick look showed me many more profiles I can’t wait to dig into, such as architect Philip Johnson, sculptor Claes Oldenburg and artist Robert Rauschenberg (from 1964, when the artist was 38 years old!)
For a long time, I had heard about writer A.J. Liebling, who wrote extensively about prizefighting, food and politics for the magazine. Here was a list of everything he had written, starting in 1933 and continuing for the next thirty years. In a random selection of a piece entitled, Letter From Gaza, Liebling writes as if the events he’s authoring are taken from today’s newspapers, until a quick look shows the date, March 16, 1957, and I am immediately sobered by the fact that as time and technology have marched on, allowing me to hold this incredible 4,000 volume collection in my hands, many things sadly remain the same.
Sure, I have a few complaints about TCNY, like the poor quality of the pages when printed on my laser printer (most likely due to the greyscale scans), the digitally distorted look of some of the photos (once again, it looks like a scanning thing), the lack of full-text search, or the use of a proprietary reader instead of the ubiquitous and much more fully-featured Adobe Reader, but the sheer joy of having at least some working version of this archive overweighs its faults…for now.
May 10, 2007 | Link to this entry